Will IRS budget cuts affect your tax refund? IRS Commissioner John Koskinen testified before congress earlier this year and warned that the recent budget cuts to his agency would affect tax refunds this year. But, in a recent interview with USA Today he said “It’s possible that the level of service won’t be as bad as we worry about it.”
So, here’s a view from the front lines. So far, for my clients, the efiing system is working well and I haven’t had any complaints about delayed refunds with efiled returns. There has been a slight slow down in refunds from paper filed returns. If you need to file an amended return, all I can say is “Be Patient”. There was a significant slow down in the processing of amended returns last year and I expect that will continue this year. If you want to check the status of your federal refund. You can use the Where’s my Refund feature at irs.gov.

The headline reads “People Jailed for Owing Less Taxes than Al Sharpton” That is absolutely false. All of the people mentioned in the article were convicted and jailed for committing tax fraud, not for just owing taxes. Unlike willful tax evasion, owing taxes is not a criminal offense. The IRS has authority to do many things to a delinquent taxpayer such as, levying wages and bank accounts, or even seizing assets but they cannot send you to jail simply for owing taxes. Mr. Sharpton once pleaded guilty to a misdemeanor charge for failing to file a state tax return, but he has not been convicted in court of tax evasion.

What if you receive a notice from the IRS that you owe back taxes? You should never ignore such a notice because the longer you procrastinate in dealing with the issue, the more serious your consequences can become. You should respond promptly to either dispute the liability or address it. Enrolled Agents are licensed to represent taxpayers before the IRS in various matters including collections. If you need help, they can be your advocate in reaching the best resolution to your tax problem.

There’s an article on Fox Business which explores the hefty tax bill that the IRS gets to collect from Tom Brady as a result of winning the Super Bowl. There is a lot of accurate information in that article, but there is a point on gift tax which is incomplete at best. Forbes has an article which gives a much more thorough explanation of gift tax and the tax treatment of prizes and awards. Although most of you do not have to worry about what taxes you will owe because of winning the Super Bowl, anyone interested in gift tax can learn some basics from those articles. I would be happy to answer any questions on the topic or you can contact a competent professional in your area such as an Enrolled Agent or CPA.